Technology Products that Defined 2007

Friday Dec 21st 2007 by Rob Enderle
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I was at CES when Apple announced the iPhone, and it was like looking at a bunch of deer in headlights when the press realized they were in the wrong place and the folks making phones realized they were taking a hit.

This is a holiday week for most of you so I want to keep it light and fun. Let’s talk about the products that defined 2007. I’ll start with the offering that took CES last year, to the surprise of everyone there:

The Apple iPhone

I was at CES last year and when Apple announced the iPhone it was like looking at a bunch of deer in headlights when the press at the show realized they were in the wrong place and the folks making phones realized they were screwed. The reason they were screwed was they were going to have to go back to their bosses and explain how a company coming in from left field swiped all of the energy from their market in one move. That doesn’t happen often and the last time was the iPod. You’d think, given the rumors, they would have at least seen it coming.

By the time the iPhone actually launched only one vendor, HTC, had a competing product on the market that had been developed after the announcement. And LG, which had the Prada that actually proceeded the iPhone, was left wondering why they hadn’t done better. A brilliant combination of product design, OS, and marketing execution defended this product – and overshadowed the similar iPod Touch.

Microsoft Sync

If Microsoft had made the same marketing effort with Plays for Sure that they are making for Sync it would have taken a bite out of Apple. As it is, this technology is now moving Ford cars in what has been a very tough year for U.S. automakers. Showcasing a vastly better experience with even the iPod than currently exists with any car/MP3 Player/Phone solution, this is the way it should have always been. And it’s the first time, perhaps ever, that Microsoft has had the same kind of product/marketing/execution that Apple is famous for.

If this execution can transition to other things this company could become a top player again.

Google

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However Google will be giving Microsoft a run for the money in that they are defining the advertising-funded software as a service space. So far they have yet to transition into business and it was a move in that direction that sunk Netscape, so there clearly is risk. However, if there is any one company which has more positional power than Google right now I don’t know who they are. Microsoft still has more clout broadly but appears to be in decline in this regard and Google is in line to take their place just as Microsoft took IBM’s a decade ago. Their exposure is less now from Microsoft than the massive number of smaller properties that are looking to nibble away their dominance. Holding on to what they’ve acquired will become vastly more difficult in 2008. become vastly more difficult in 2008.

Nintendo Wii

Nintendo was all but out of the segment they once dominated for the first half of this decade. With the launch of the Wii they came roaring back, helped knock the then current leader Sony into distant 3rd place and moved to challenge the Xbox, which had enjoyed a one year head start for dominance by year end.

They did this by remembering what the other two players had forgotten and that was that players have to be affordable and $200 is the magic number, and that there are woman as a potential audience. Nintendo exploded into the market and a year after launch they still can’t meet demand, as this product remained constrained this holiday season as well. A lesson may come from this last that isn’t positive because recent Xbox and PS3 sales may have a lot to do with the fact folks can’t get Wiis and need to have something under the tree. These customers probably won’t buy a Wii now and Nintendo may have lost a billion or more in potential sales as a result.

Amazon Kindle

There wasn’t much of a market for eBooks this decade largely because the readers kind of sucked, the buying experience sucked, and the selection of eBooks you could buy really sucked. Sony had belly-flopped its own nicely designed eBook reader a year earlier but hadn’t fixed either the buying or the inventory problem.

Amazon’s Kindle wasn’t as elegant in terms of hardware. But it worked well in use and they addressed both the buying experience and the inventory thing very well.

As a result, to the surprise of almost everyone the product sold out and was one of the hot products by the end of the year, even though it was about twice as expensive as it likely should be for sustainable volumes. It also showcased that it is better to get the product right and have it priced above market than it is to make the product incomplete and hit the price target. People will pay extra for a good product; they won’t pay anything for junk.

MediaSmart Home Server

The MediaSmart Server redefined what could go in the home and it was, in its initial weeks, one of the top selling products in the technology segment. A massive amount of effort went into this product between HP and Microsoft showcasing the power of the partnership and creating something that wouldn’t have been anywhere near as good had it come exclusively from either company.

In a way this was one of the very rare instances where a partnership between two companies created something where both sides appeared to contribute equally. On the iPhone, for instance, AT&T was often seen as the big negative with that offering and Apple had to carry most of the weight.

HP Blackbird

HP was on a roll with joint Blackbird project, though this one was between Voodoo, the gaming company they had purchased, and HP Labs.

It resulted in the first automotive quality PC ever built and the case actually was built by an automobile parts company. Uniquely able to use graphics cards from both NVIDIA and ATI, and designed to be upgraded and use water cooling, this offering turned the gaming PC segment on its ear and set up expectations for what may be a stunning gaming laptop next year.

Dell XPS One

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The Gateway One was the first All-In-One PC to really challenge Apple in 2007. But, while it was gorgeous it looked unfinished from the back and top and lacked the marketing to drive it to good volumes. The Dell XPS One was finished and rolled with a marketing program that showcased the product well and, if you are going to make a run at Apple, you have to have both parts or it likely won’t go that well. The Dell One is probably the best full execution of a product in this class from anyone but Apple and it represents a case study on how this stuff should be done.

Microsoft’s Port 25 Website

In the area of embracing the competition this probably sets a record of some sort. Port 25 was Microsoft’s attempt to embrace the Open Source community and it actually was rather well received. More important, it became a soapbox for change inside of Microsoft and will likely have more to do with what happens strategically inside core aspects of the company’s enterprise software and services strategy than any of the major product groups. An interesting lesson on how to think differently about a problem, and it nearly completely reversed the failing in-your-face strategy that preceded it.

Disney.Com

While clearly dealing with an audience much younger than we are, Disney.Com Disney.Com set the standard on how to do a focused web site, on-line games, and related security in a market often defined by bad behavior, excessive violence and predators. Truly an object lesson on how to approach a well-defined audience and define a very intuitive web interface and on-line gaming set of properties, this is one of the most impressive web-based efforts we saw in 2007. What else is interesting is that unlike most gaming properties in the Pirates of the Caribbean class, their gaming offering runs on older hardware, which is what kids are often using in practice and showcases how much you can do without pushing hardware hard.

Facebook

2007 was Facebook’s year to emerge dominant in the social networking space, easily eclipsing MySpace the previous champion.

The company remained independent and picked up Microsoft as a partner, which is probably the only time Microsoft has been a White Knight. The site went down the platform path, providing an opportunity for potential competitors to more quickly get to revenue by being under the Facebook umbrella rather than competing with it. While they had some privacy issues towards the end of the year that may adversely impact them in 2008, in 2007 they were the poster child social network and appeared to do a better job preventing competition than Google did.

Setting the Stage for 2008

These were the products I thought defined 2007, and set the stage for what could be an incredibly 2008. Now all eyes turn to CES and MacWorld where the titans will clash and every effort will be made to make sure Steve Jobs doesn’t steal the show again. Given the laptop, PC, and Cell Phone announcements Steve is expected to make, I’m not sure I’d bet against Apple doing this again.

Have a Happy New Year!

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